Written Answers - Tax Reliefs.

Thursday, 5 February 2004

Dáil Eireann Debate
Vol. 579 No. 3

Page of 109

68.Mr. R. Bruton
asked the
Minister for Finance
the amount of pension relief availed of by taxpayers classified by income range, itemising both the amount of tax relief received and the number of taxpayers in each income range.
[3455/04]

Minister for Finance (Mr. McCreevy):As part of my reforms in the pensions area and with the aim of encouraging more people to increase their pension coverage, I increased the contribution limits for retirement annuity contracts in section 19 of the 1999 Finance Act for the tax years 1999/2000 and onwards. The new limits ranged from 15% of net relevant earnings for contributors up to 30 years of age to 30% of net relevant earnings for contributors over 50 years of age. Prior to this, the limit was 15% for persons up to the age 55 and 20% for those aged 55 or over. The increase was particularly significant for [899]those over the age of 50, who would normally be in a much better position to fully fund their pensions than those in younger age groups who might not be able to contribute as much as they would like due to other family and financial commitments. At the same time, I also imposed an annual contribution earnings cap of £200,000 which is now €254,000. There had been no such earnings cap prior to this and the cap has not been increased since 1999.

Similar contribution limits and an earnings cap also apply in the case of the new PRSAs which were introduced by the Pensions Amendment Act 2002.

I provided for the same higher limits for employee contributions to occupational pension [900]schemes in section 10 of the 2002 Finance Act. The limits in these schemes are subject to the same annual earnings cap of €254,000 and contributions have also to be in conformity with the overall existing maximum pensions benefit rules applied by the Revenue Commissioners.

I am informed by the Revenue Commissioners that the only relevant information available is in respect of income tax relief allowed for contributions to retirement annuity contracts for the income tax year 2000/01, which is available to the self-employed and to employees not in occupational pension schemes.

The information is contained in the following table. Corresponding information is not available in respect of contributions to occupational pension schemes.

Income Tax 2000-2001

Retirement Annuity — by range of Gross Income

Range of Gross Income

Totals

From

To

Number of claimants

Amount of deduction

Reduction in tax

€

€

€

€

—

7,000

1,177

1,955,819

78,893

7,000

8,000

445

460,313

58,009

8,000

9,000

482

517,362

72,595

9,000

10,000

605

677,315

104,375

10,000

12,500

2,085

2,556,593

414,447

12,500

15,000

3,018

4,048,740

716,147

15,000

17,500

3,748

5,251,284

995,191

17,500

20,000

4,534

6,702,992

1,383,079

20,000

22,500

5,039

7,913,913

1,827,405

22,500

25,000

5,170

8,673,220

2,401,776

25,000

27,500

5,222

9,570,368

2,885,250

27,500

30,000

4,802

9,484,550

2,925,870

30,000

32,500

4,656

9,943,080

3,055,705

32,500

35,000

4,263

9,537,566

2,926,141

35,000

37,500

4,130

9,663,805

2,903,120

37,500

40,000

3,933

10,038,129

3,257,816

40,000

42,500

3,631

9,501,707

3,293,735

42,500

45,000

3,435

9,713,142

3,530,458

45,000

47,500

3,086

9,011,157

3,504,334

47,500

50,000

2,914

9,281,690

3,636,036

50,000

60,000

9,270

35,138,405

14,619,369

60,000

75,000

8,409

43,294,064

18,686,681

75,000

100,000

6,608

50,258,905

21,959,343

Over
100,000

11,041

250,248,583

109,779,797

Totals

101,703

513,442,702

205,015,573

[899]

69.Mr. R. Bruton
asked the
Minister for Finance
the total value of funds in tax exempt managed funds such as approved retirement funds.
[3456/04]

Minister for Finance (Mr. McCreevy):There is no requirement in law for the managers of tax exempt managed funds such as approved [900]retirement funds to provide the Revenue Commissioners with details of the amount of funds held in such investment vehicles.

70.Mr. R. Bruton
asked the
Minister for Finance
if research has been done regarding the number of taxpayers receiving pension relief in any year in excess of €100,000.
[3457/04]

Minister for Finance (Mr. McCreevy):As part of my reforms in the pensions area and with the aim of encouraging more people to increase their pension coverage, I increased the contribution limits for retirement annuity contracts in section 19 of the 1999 Finance Act for the tax years 1999/2000 and onwards. The new limits ranged from 15% of net relevant earnings for contributors up to 30 years of age to 30% of net relevant earnings for contributors over 50 years of age. Prior to this, the limit was 15% for persons up to the age 55 and 20% for those aged 55 or over. The increase was particularly significant for those over 50, who would normally be in a much better position to fully fund their pensions than those in younger age groups who might not be able to contribute as much as they would like due to other family and financial commitments. At the same time, I also imposed an annual contribution earnings cap of £200,000 which is now €254,000. There had been no such earnings cap prior to this and the cap has not been increased since 1999.

Similar contribution limits and an earnings cap also apply in the case of the new PRSAs which were introduced by the Pensions Amendment Act 2002.

I provided for the same higher limits for employee contributions to occupational pension schemes, in section 10 of the 2002 Finance Act. The limits in these schemes are subject to the same annual earnings cap of €254,000 and contributions have also to be in conformity with the overall existing maximum pensions benefit rules applied by the Revenue Commissioners.

I am informed by the Revenue Commissioners that statistics are only available in respect of income tax relief allowed for contributions to retirement annuity contracts. On the basis of these statistics there were six claimants who each received tax relief of an amount in excess of €100,000 for the income tax year 2000/01 in respect of their contributions to retirement annuity contract schemes. Statistics are not available in respect of contributors to occupational pension schemes claiming tax relief in excess of €100,000 on their contributions.

71.Mr. Naughten
asked the
Minister for Finance
the plans he has to introduce capital gains tax and stamp duty relief for elderly people downsizing in accommodation; and if he will make a statement on the matter.
[3506/04]

Minister for Finance (Mr. McCreevy):If tax concessions were introduced for older persons wishing to trade down, it would have the effect of increasing the supply of larger (and generally more expensive) houses relative to demand. This would be of benefit to people at the top end of the market. However, the demand for property relative to supply at the lower end of the market would increase and this would adversely affect first-time buyers, in particular, who would have to compete for such houses with a larger number [902]of people consequently. Persons trading down normally have the cash up front to pay for smaller houses and would generally have no stamp duty liability on a new house or a small liability on a second hand property.

It should also be noted that people trading down can already avail of the principal private residence relief which is a substantial exemption from capital gains tax. If the house has been occupied for the full period of ownership, full exemption applies. Otherwise, the relief granted is in proportion to the period of occupation over the entire period of ownership. This relief, combined with the capital sum received on the sale, means that most older people with large homes already have sufficient financial incentive to trade down.

I consider these reliefs to be sufficiently generous and appropriate and accordingly, I have no plans to introduce further concessions for any category of individual wishing to trade down.

72.Mr. Durkan
asked the
Minister for Finance
if a tax refund in respect of rent paid will be made in the case of a person (details supplied) in County Kildare; and if he will make a statement on the matter.
[3542/04]

Minister for Finance (Mr. McCreevy):I am advised by the Revenue Commissioners that the taxpayer may make a claim for rent paid in respect of private rented accommodation. Form rent 1 was issued to the taxpayer today outlining the information required to process the claim. The information may be supplied by completion of the form rent 1 or by telephone at 1890-444425.